Insurance (Prudential Supervision) Amendment Regulations 2011

2011/278

Coat of Arms of New Zealand

Insurance (Prudential Supervision) Amendment Regulations 2011

Anand Satyanand, Governor-General

Order in Council

At Wellington this 22nd day of August 2011

Present:
His Excellency the Governor-General in Council

Pursuant to section 237 of the Insurance (Prudential Supervision) Act 2010, His Excellency the Governor-General, acting on the advice and with the consent of the Executive Council, and on the advice of the Minister of Finance given in accordance with a recommendation of the Reserve Bank of New Zealand, makes the following regulations.

Regulations

1  Title
  • These regulations are the Insurance (Prudential Supervision) Amendment Regulations 2011.

2  Commencement
  • These regulations come into force on 1 October 2011.

3  Principal regulations amended
4  New heading and regulation 14 added
  • The following heading and regulation are added:

    Class of contracts declared not to be life policies

    14 Certain consumer credit insurance contracts are not life policies
    • (1) For the purposes of section 84(4) of the Act, specified consumer credit insurance contracts are declared to be a class of contracts that are not life policies.

      (2) A contract is a specified consumer credit insurance contract if—

      • (a) the contract is entered into in connection with a loan; and

      • (b) by the terms of the contract, all of the following apply:

        • (i) the duration of the contract is not more than 5 years:

        • (ii) a lump sum is payable in either or both of the following situations:

          • (A) in the event of the death of an insured person:

          • (B) in the event of the disablement of an insured person as a result of accident or sickness:

        • (iii) the sum insured in respect of the benefit referred to in subparagraph (ii) is limited to the unpaid balance under the loan at the time of the event referred to in that subparagraph:

        • (iv) regular payments are payable in either or both of the following situations:

          • (A) in the event of the disablement of an insured person as a result of accident or sickness:

          • (B) in the event of the redundancy of an insured person:

        • (v) the liability of the insurer to make the regular payments referred to in subparagraph (iv) is to be determined by reference to the liability of the insured under the loan:

        • (vi) the maximum period for which the regular payments referred to in subparagraph (iv) may be made does not exceed the remaining term of the loan; and

      • (c) the contract does not provide for any benefits other than those referred to in paragraph (b); and

      • (d) the insurer is a non-life insurer.

      (3) In subclause (2),—

      loan

      • (a) means a consumer credit contract within the meaning of section 11 of the Credit Contracts and Consumer Finance Act 2003; but

      • (b) does not include a credit contract entered into primarily for the purpose of providing finance to enable, or facilitate, the purchase of real property

      non-life insurer means an insurer that, if contracts that satisfy the requirements referred to in subclause (2)(a) to (c) are disregarded, is not liable under any life policy

      unpaid balance means the amount owing under a loan at a particular time, being the difference between all amounts credited and all amounts debited to the debtor under the loan at that time.

 Rebecca Kitteridge,
Clerk of the Executive Council.


Explanatory note

This note is not part of the regulations, but is intended to indicate their general effect.

These regulations, which come into force on 1 October 2011, amend the Insurance (Prudential Supervision) Regulations 2010 by declaring certain consumer credit insurance contracts not to be life policies for the purposes of the Insurance (Prudential Supervision) Act 2010.


Issued under the authority of the Acts and Regulations Publication Act 1989.

Date of notification in Gazette: 25 August 2011.

These regulations are administered by the Reserve Bank of New Zealand.